Question

Why Vietnam poor country twenty years ago?Explain growth of Vietnam economy since 1987

Answer 1

Economic conditions of Vietnam twenty years ago :-

1) Vietnamese economy was mainly village oriented agrarian economy .

2) The second Indo China war strained Vietnamese economy from 1954-1975 depleting major sources of income and wealth .

3) The major characteristics of economy included :-

a- Small Scale Production .

b- Low labor productivity .

c- unemployment

d - material and technological shortfalls

e - Insufficient food and consumer goods .

Growth of Vietnam Economy since 1987 :-

1) Doi Moi :-

The launch of Doi Moi an economic renewal campaign in 1986 proved to be a turning point in the economic development of the country .

The main features of Doi Moi were :-

1) Transition from a centrally planned economy to a socialist oriented market economy .

2) Encouraging foreign investment and private businesses to establish their business in the country by giving them free market incentives. This helped to increase the production of consumer good and remove the insufficiency of food items .

3) This step completely reformed Vietnamese economy and the economy was growing at an annual rate of more than 7%.

2) Bilateral agreement between United States and Vietnam :-

In 2000 a Bilateral agreement was signed between USA and Vietnam which gave access to Vietnamese goods to US markets . This transformation of Vietnamese economy into a manufacturing based export oriented economy subsequently attracted foreign investment to Vietnam further strengthening it's economy .